NEW YORK, Nov. 29, 2011 /PRNewswire-Asia/ -- Changyou.com
Limited ("Changyou") (NASDAQ: CYOU), a leading online game
developer and operator in China,
and its majority shareholder, Sohu.com Inc. ("Sohu") (NASDAQ:
SOHU), China's leading online
media, search, gaming, community and mobile service group, today
jointly announced that on November 29,
2011 they entered into a definitive agreement (the
"Transaction Agreement") for Changyou to acquire from Sohu the
business of 17173.com ("17173"), a leading game information portal
in China (the "17173 Business").
17173.com is widely regarded as an authoritative source of news for
a wide variety of games.
(Logo: http://photos.prnewswire.com/prnh/20111129/CN14380LOGO
)
Under the Transaction Agreement, Changyou will acquire from Sohu
all assets associated with the 17173 Business for fixed cash
consideration of US$162.5 million.
The transaction is expected to close in December 2011, subject to customary closing
conditions specified in the Transaction Agreement. In connection
with the Transaction Agreement, Sohu and Changyou have revised
their existing non-competition agreement to provide Sohu's
agreement not to compete with Changyou in the 17173 Business for a
period of five years after the closing under the Transaction
Agreement.
Mr. Tao Wang, Changyou's chief executive officer, said,
"Changyou's acquisition of the 17173 business provides us with a
powerful base to jumpstart our services and platform initiative. As
a leading online destination for gamers in China, 17173 has strong media presence in the
games sector and a vast base of users for which we can develop
services and tools to grow 17173 into a leading platform and
one-stop-shop service-provider for gamers. Aside from news
services, gamers today have needs for downloading, sharing, and
trading services, as well as online community, and more. This
acquisition will further drive our efforts to serve gamers not only
on the product side, but also on the service side."
Mr. Tao Wang further commented, "We look forward to building on
the brand strength 17173 has developed over the past 10 years and
enhancing its services to make it an even more powerful and
effective marketing medium for advertising clients. Our leading
position in Web-based games and our mobile game initiatives give us
advanced market knowledge that 17173 can leverage to plan and grow
its news channels more effectively. In addition, our offline
promotion workforce and our network of overseas game companies can
also be used to promote 17173 and further increase its penetration
in domestic market and accelerate its expansion into new
markets."
Dr. Charles Zhang, Sohu's
chairman and chief executive officer said, "This transaction helps
to re-align our business activities, and brings together Sohu's two
leading game-related businesses, and their respective management
teams. We share Changyou's vision for 17173 and support their
strategy to scale its portal and services to deliver more content,
tools and services to an even larger audience. The combination of
Changyou and 17173 is expected to bring about synergies that will
increase the shareholder value of both businesses over the long
term, and Sohu will enjoy the benefit of any such increase as a
majority shareholder in Changyou."
17173.com is a well-established news provider and advertising
medium for games in China and a
leading online destination for gamers. Highly regarded by gamers
for its authoritative reporting of game-related news, it has
captured the top spot in the "Game Media" category at the Annual
Game Industry Awards Gala for the past six years. 17173 currently
provides its vast user base with rich content channels that tap
into the wide span of gamers' interests, covering everything from
"Massively Multiplayer Online Games" to "eSports" to "Game Unions",
plus over 650 dedicated game zones for popular games.
Separately, Changyou and Sohu have entered into a services
agreement and an online links and advertising agreement
(collectively, the "Services and Advertising Agreements"), pursuant
to which Sohu will provide specified technical support and links
and advertising space to Changyou, including the provision and
maintenance of the user log-in system, information management
system and virtual currency payment system. The Services and
Advertising Agreements will provide for a term of twenty-five years
for the virtual current payment system services, and an initial
term of three years for all the other relevant services and links
and advertising space and will involve aggregate fees to Sohu of
approximately US$30 million.
Under the Services and Advertising Agreements, Changyou may
renew certain rights for a subsequent term of twenty-two years, and
may obtain a perpetual software license in respect of the
information management system and user log-in system following the
expiration of the three-year term, subject to Changyou's payment to
Sohu of additional fees of up to approximately US$5 million in aggregate.
The Boards of Directors of both Changyou and Sohu have approved
the Transaction Agreement, and the transactions and related
agreements contemplated thereby, and the Services and Advertising
Agreements. Because the Transaction Agreement is a quite
significant transaction for both Changyou and Sohu and the
transactions and related agreements contemplated thereby and the
Services and Advertising Agreements are related-party transactions
between Changyou and Sohu, the Audit Committees of both companies
independently reviewed and approved such agreements and
transactions, both companies received third-party fairness opinions
as to the fairness, from a financial point of view, of the
consideration under the Transaction Agreement and each of their
Audit Committees recommended approval of such agreements and
transactions to their respective full Boards of Directors. In
addition, in view of Dr. Charles
Zhang's positions as the Chairman of the Board and Chief
Executive Officer of Sohu and Chairman of the Board of Changyou,
Dr. Zhang recused himself from participation in the
negotiation of such agreements, did not participate in discussion
of such agreements and transactions by Changyou's Board of
Directors and abstained from voting on such agreements and
transactions on Changyou's Board of Directors.
Conference Call Information
Changyou's management team, together with Sohu's management
team, will host a joint conference call today at 8:30 a.m. U.S. Eastern Standard Time,
November 30, 2011 (9:30 p.m. Beijing/Hong
Kong, November 30, 2011).
The dial-in details for the live conference call are:
US:
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+1-866-519-4004
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Hong Kong:
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+852-2475-0994
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International:
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+1-718-354-1231
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Passcode:
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CYOU
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Please dial in 10 minutes before the call is scheduled to begin
and provide the passcode to join the call.
A telephone replay of the call will be available after the
conclusion of the conference call at 3:30
a.m. U.S. Eastern Standard Time on December 1 through December 7, 2011. The dial-in
details for the telephone replay are:
International:
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+1-718-354-1232
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Passcode:
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31748427
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The live webcast and archive of the conference call will be
available on the Investor Relations section of Changyou's website
at http://www.changyou.com/ir/ and Sohu's website at
http://corp.sohu.com/.
About Changyou
Changyou.com Limited (NASDAQ: CYOU) is a leading developer and
operator of online games in China
with a diverse portfolio of online games that includes Tian Long Ba Bu, one of the most popular
massively multi-player online ("MMO") games in China, and DDTank, one of the top-ranking
Web-based games in China. It began
operations as a business unit within Sohu.com Inc. (NASDAQ: SOHU)
in 2003, and was carved out as a separate, stand-alone company in
December 2007. It completed an
initial public offering on April 7,
2009. Changyou has an advanced technology platform that
includes advanced 2.5D and 3D graphics engines, a uniform game
development platform, effective anti-cheating and anti-hacking
technologies, proprietary cross-networking technology and advanced
data protection technology. For more information, please visit
http://www.changyou.com/ir/.
About Sohu.com
Sohu.com Inc. (NASDAQ: SOHU) is China's premier online brand and indispensable
to the daily life of millions of Chinese, providing a network of
web properties and community based/web 2.0 products which offer the
vast Sohu user community a broad array of choices regarding
information, entertainment and communication. Sohu has built one of
the most comprehensive matrices of Chinese language web properties
and proprietary search engines, consisting of the mass portal and
leading online media destination www.sohu.com; interactive search
engine www.sogou.com; games information portal www.17173.com; the
top real estate website www.focus.cn; #1 online alumni club
www.chinaren.com; wireless value-added services provider
www.goodfeel.com.cn; leading online mapping service provider
www.go2map.com; and developer and operator of online games
www.changyou.com/en/.
Sohu corporate services consist of online brand advertising on
its matrix of websites as well as bid listing and home page on its
in-house developed search directory and engine. Sohu also offers
wireless value-added services such as news, information, music,
ringtone and picture content sent over mobile phones. Sohu's online
game subsidiary, Changyou.com (NASDAQ: CYOU) and its subsidiaries
currently operates over 10 online games that includes in-house
developed MMORPGs, such as Tian Long Ba
Bu, one of the most popular online games in China, as well as Web-based games such as
DDTank. Sohu.com, established by Dr. Charles Zhang, one of China's internet pioneers, is in its fifteenth
year of operation.
Safe Harbor Statement
This announcement contains forward-looking statements by either
or both of Changyou and Sohu. Statements that are not historical
facts, including statements about either company's beliefs and
expectations, are forward-looking statements. These statements are
based on current plans, estimates and projections, and therefore
you should not place undue reliance on them. Forward-looking
statements involve inherent risks and uncertainties. Each company
cautions that a number of important factors could cause actual
results to differ materially from those contained in any
forward-looking statement. Potential risks and uncertainties
include, but are not limited to, the continuing global financial
and credit markets crisis and its potential impact on the Chinese
economy, the uncertain regulatory landscape in the People's Republic of China, fluctuations
in Changyou's, Sohu's and the 17173 Business's operating results
and Changyou's, Sohu's and the 17173 Business's historical and
possible future losses and limited operating history, and
Changyou's reliance on Tian Long Ba
Bu as its major revenue source. Further information
regarding these and other risks is included in Changyou's Annual
Report on Form 20-F filed on February 28,
2011, Sohu's Annual Report on Form 10-K filed on
February 28, 2011, Quarterly Report
on Form 10-Q for the quarter ended June 30,
2011 and Quarterly Report on Form 10-Q for the quarter ended
September 30, 2011, and other filings
by Changyou and Sohu with the Securities and Exchange
Commission.
For investor and media inquiries, please contact:
In China:
Ms. Angie Chang
Changyou.com Limited
Tel: +86 (10) 6861-3688
E-mail: ir@cyou-inc.com
Mr. James Deng
Sohu.com Inc.
Tel: +86 (10) 6272-6596
E-mail: ir@contact.sohu.com
In the United
States:
Mr. Jeff Bloker
Christensen
Tel: +1 (480) 614-3003
E-mail: jbloker@ChristensenIR.com
SOURCE Changyou.com Limited